Hosting a wind turbine on your land
Some farmers and landowners get a letter from a developer who would like to put wind turbines on their land.
A scheme like this can bring in rent for many years. These notes explain how the agreements usually work, so you can go into the talks knowing what to look for. They draw on the guidance the Royal Institution of Chartered Surveyors (RICS) gives to surveyors who act for landowners.
How the talks usually begin
Most developers first ask for exclusivity over a site. That stops you talking to other developers for a time. RICS suggests keeping any exclusivity short, with dates by which terms must be agreed.
Next come heads of terms. These set out the main points of the deal and are usually marked "subject to contract". It pays to agree as much detail as you can at this stage, with your solicitor involved early.
The option and the lease
The most common deal is an option for a lease. The option gives the developer time to apply for planning permission. If permission is granted, the developer can call for the lease.
RICS says most option periods are three to five years, and they can sometimes be extended. A draft of the lease is usually attached to the option. Leases are usually for 25 years from when the project is finished, though the term can be linked to the life of the machinery.
How you are paid
A landowner is often paid an option fee on signing, and annual fees while the option runs. One-off payments can also be agreed when planning is granted, when building starts or when the turbines start working.
Once the scheme runs, the rent is usually linked to its turnover. It can be a percentage of the scheme's income, or a fixed rate for each unit of electricity it exports. RICS advises securing a minimum rent as well.
Planning and the grid
A scheme needs two things before it can go ahead. One is planning permission. The other is a connection to the grid so the power can be exported.
In England, the planning framework asks decision-makers to give substantial weight to the benefits of renewable energy. Developers bear the risk and cost of seeking planning, according to RICS. Grid space can be scarce. The national system operator says projects seeking to connect could produce over 550 gigawatts, against nearly 90 gigawatts already connected, as of July 2024.
The land at the end of the lease
England's planning framework asks time-limited schemes to include plans for decommissioning and restoring the site. RICS also recommends a restoration bond from the developer, and a clear record of the land's condition before work starts.
Getting good advice
A chartered surveyor and a solicitor can act for you in the talks. RICS says the general principle is that the developer meets the landowner's reasonable legal and professional costs, unless it is a joint venture. It also says tax planning should start early. Land used for a scheme does not get agricultural property relief, which can matter for inheritance tax.
Check who owns any mineral, sporting or other rights over the land, and whether a lender or tenant needs to agree.